10-QPeriod: Q3 FY2018

AMERICAN TOWER CORP /MA/ Quarterly Report for Q3 Ended Sep 30, 2018

Filed October 30, 2018For Securities:AMT

Summary

American Tower Corporation (AMT) reported its third-quarter and year-to-date results for the period ending September 30, 2018. The company demonstrated solid revenue growth, primarily driven by tenant billings and strategic acquisitions. Operating income saw a modest increase year-over-year, reflecting the company's ability to manage costs effectively. The balance sheet shows an increase in cash and cash equivalents, alongside a manageable increase in total liabilities, largely due to long-term obligations. Key to investors is the continued strong operational performance, supported by ongoing demand for communications infrastructure, and a clear focus on returning capital to shareholders through distributions and share repurchases. Financially, AMT reported total revenues of $1.79 billion for the third quarter and $5.31 billion for the nine months ended September 30, 2018, representing year-over-year growth. Net income attributable to common stockholders was $366.9 million for the quarter and $958.8 million for the nine months. The company also highlighted its robust liquidity position, with substantial cash and cash equivalents and available credit facilities. Management reiterated its confidence in sustaining these positive trends, driven by global demand for wireless services and strategic expansion, while managing risks such as carrier consolidation in certain markets.

Financial Highlights

53 data points
Beta

Revenue

$1.79B

99.2% Gross Margin

Net Income

$366.90M

20.5% Net Margin

EPS (Diluted)

$0.83

Total Assets

$33.08B

Cash & Equivalents

$1.03B

Free Cash Flow

$753.30M

Financial Statements
Beta
Revenue$1.79B
Cost of Revenue$13.60M
Gross Profit$1.77B
SG&A Expenses$177.90M
Operating Expenses$1.22B
Operating Income$567.20M
Interest Expense$209.20M
Net Income$366.90M
EPS (Basic)$0.83
EPS (Diluted)$0.83
Shares Outstanding (Basic)440.89M
Shares Outstanding (Diluted)444.12M

Key Highlights

  • 1Total revenues increased by 6% to $1.79 billion for Q3 2018 and by 7% to $5.31 billion for the nine months ended September 30, 2018, driven by property and services segments.
  • 2Operating income for the third quarter was $567.2 million, a slight increase from $561.1 million in Q3 2017, indicating stable operational performance.
  • 3Net income attributable to common stockholders rose to $366.9 million in Q3 2018 from $298.4 million in Q3 2017, showing improved profitability.
  • 4The company executed significant acquisitions in India (Idea Cellular) and Europe (FPS Towers), contributing to revenue growth and expanding its global footprint.
  • 5Cash provided by operating activities increased to $2.49 billion for the nine months ended September 30, 2018, up from $2.14 billion in the prior year, demonstrating strong cash generation.
  • 6Total debt increased slightly to $21.3 billion as of September 30, 2018, but the company maintained compliance with its debt covenants and reported sufficient liquidity.
  • 7Distributions per common share increased to $0.79 in Q3 2018 from $0.66 in Q3 2017, reflecting a commitment to shareholder returns.

Frequently Asked Questions

American Tower Corporation is a leading independent owner, operator, and developer of multitenant communications real estate. Its primary business is leasing space on communications sites (towers) to wireless service providers, broadcast companies, and other tenants. Revenue is primarily generated from these leasing arrangements, supplemented by tower-related services in the U.S.

The company completed several significant acquisitions during the period, including the Idea Cellular acquisition in India and the Vodafone acquisition in India, as well as the FPS Acquisition in France. These acquisitions contributed to revenue growth and expanded the company's portfolio, although they also led to increased operating expenses and amortization.

AMT reported a strong liquidity position with $1.03 billion in cash and cash equivalents and significant availability under its credit facilities as of September 30, 2018. Total debt stood at $21.3 billion, but the company maintained compliance with its debt covenants and expects its operating cash flow and credit facilities to be sufficient to meet its obligations, including capital expenditures, distributions, and acquisitions.

The company noted risks related to carrier consolidation in India, which has led to increased churn and impairment charges. Additionally, foreign currency fluctuations, particularly impacting the Indian Rupee and Brazilian Real, had a negative effect on reported revenues and assets. The company also highlighted its dependence on a few key tenants.